Car insurance coverage is an important concept that you must understand while buying car insurance. You drive to work or take your family to work and fun drives or enjoy time with friends. As a responsible car owner, you keep your vehicle in good condition, follow the rules of the road on the road and practice good driver etiquette.
And for that, you want your car driving to be a worry-free experience. Despite your precautions, your car may face unforeseen contingencies on the road, such as major or minor accidents, breakdowns, tire bursts, natural/man-made calamities, etc.
Car insurance is the best way to free you from financial worries in such situations. Under all types of car insurance, protection is provided against financial loss arising out of any unfortunate event involving your car, subject to the specific terms and conditions of your policy.
When your car does get into an accident, you should focus on recovering from the trauma and not worry about the financial implications. To eliminate any such incident with little worry, you should always have enough car insurance and keep it in force.
What is Car Insurance? go in hindi
As per the rules of Motor Vehicle Act 1988, third party insurance in basic personal car insurance in India is mandatory by all the states. Because it provides you some financial security in case of an accident. But is this enough? And what are its alternatives? Learn how car insurance works and what types of coverage are available.
How does car insurance work in India?
Car insurance is an agreement between the insurance company and the car owner wherein, the car owner will pay the car insurance premium and the insurance company covers for the loss or damage caused to the car. Car insurance is mandatory in India, be it a commercial vehicle or a personal vehicle. Most of the insurance companies in India have tie-up with the car manufacturers and they provide instant insurance quotes to the car owners.
What are the types of car insurance?
Insurance coverage refers to the types of protection available. Along with the basic coverage under the policy, you can choose from a number of add-ons to enhance the protection under the policy. Let us first talk you about the five types of car insurance coverage available in India:
- third party car insurance
Under this type of car insurance coverage, you will get the following benefits:
1.) Cost of third party repair/replacement of the damaged vehicle
2.) Cost of hospitalization and third party treatment
3.) Liabilities arising out of death of third parties
As per the Motor Vehicles Act, third party car insurance coverage is mandatory for driving a vehicle on the roads. The sum insured should be commensurate with the driving conditions and should be sufficiently high to avoid out of pocket payments on your part.
- Collision Damage or Own Damage (OD) cover
When you opt for collision damage car insurance coverage, the cost of repairing your damaged vehicle is reimbursed. To determine the cost of collision coverage, its age and the insured declared value are taken into account to arrive at the premium. This IDV is based on the market value of the vehicle.
When a claim is filed under a collision coverage policy, the maximum amount payable under the policy is given by IDV less accumulated depreciation. If you bought your vehicle on loan, you should be holding collision cover.
- personal accident cover
When you want to protect yourself by opting for reimbursement of medical expenses after an accident, i.e. the owner-driver of the car, you are using personal accident car insurance coverage.
- zero depreciation insurance
This coverage is generally offered as an add-on to car insurance policies in India. Let’s say your vehicle is damaged and you need to replace the parts. The insurer will consider the depreciable value of the parts for claim settlement. A zero depreciation cover will help you get the full claim amount without accounting for any depreciation in costs.
- Comprehensive Car Insurance
This type of coverage offers the highest level of protection as it covers liability for third parties, damage to own vehicle, personal accident cover, and all non-collision damages such as hurricane, flood, fire, and theft. You can further enhance a comprehensive car insurance policy with the option of add-ons.
What is third party insurance, and how does it work?
Third party insurance is a type of motor insurance that provides a cover against any financial liabilities that may take effect due to an accident while riding your vehicle. It has been made mandatory by the Government of India as per the Motor Vehicle Insurance Act 1988.
In third party insurance, financial coverage is provided to the third party while no coverage is provided to the rider/owner. Any property damage (to third parties), bodily injury, or permanent third party damage will be covered by third party insurance. No coverage is provided to the owner/rider in this insurance.
Therefore, if there is any damage to the policyholder’s vehicle or injury to the rider/owner, the insurer will not consider the same. If injury/damage occurs to any third party as a result of an accident, all the details need to be shared with the insurer. The insurer will then verify the matter and settle the claims with the third party.
What are the benefits of third-party insurance?
Here we will tell you what are the benefits of a third-party four-wheeler insurance policy.
1.) It is very important for all car owners to have third party insurance
2.) Third-party four-wheeler insurance policy provides basic financial coverage to the policy-holder against third-party liability arising out of loss or damage caused by any untoward incident.
3.) Third party insurance has a low premium, which makes it a cost-effective policy.
4.) This ensures peace of mind, as you do not have to worry about finances in case of an accident that involves third party liability.
What is the process to claim third party insurance?
The process of claiming third party insurance is straight-forward, you can follow the steps given below:
Step 1: Inform the insurer that you have been the victim of an accident that resulted in loss/damage/injury to the third party.
Step 2: The insurer needs to provide information such as the date and time of the accident, details of the insured and the policyholders involved, details of injuries sustained, photographs of the incident, eye-witnesses etc.
Step 3: The insurer will assess all the documents and evidence to settle the claim. with third parties accordingly.
What does car insurance cover?
Listed below are the features that are generally covered under a car insurance policy.
Bodily Injury- It provides cover for any bodily injury caused by an accident where the insured car was involved
Damage- It provides cover for damage caused to the car due to accident, theft or some natural calamities.
Damage to Third Party Property- It pays for damages caused by the third party vehicle involved in the accident with the insured car
Death- It also provides cover for the death of the driver/passengers in the insured car at the time of accident or calamity.
What are the factors affecting the premium of car insurance?
Listed below are some of the factors that affect the premium of car insurance
Vehicle related factors- making time, fuel type, model etc all matter in determining the insurance for the premium of the car. Diesel cars generally carry a higher premium than petrol cars.
Location- The premium is generally higher in urban areas and near highways.
Driver- The age and occupation of the driver also plays a role in determining the premium for car insurance. Multiple drivers lead to higher premiums.
What are not covered in car insurance?
Listed below are some car insurance clauses and exclusions.
1.) Any vehicle related problems due to normal aging of the car
2.) Consequential Damage
3.) Mechanical breakdown of the car
4.) Breakdown of car parts like tires
5.) The policy will not provide any cover for damages caused by using the car outside the geographical location of the country
6.) No cover will be given if the person is driving without a license
7.) No cover will be given if the driver was under the influence of alcohol or drugs
8.) Damage to vehicle during war or nuclear attack
The policy does not provide cover if the car is damaged while being used for purposes other than those mentioned in the policy
How to claim car insurance?
Given below is the process to make a claim in case your car is involved in an accident or any other lawful incident.
1.) In the event of an accident, the driver or passenger should immediately note down the number plate of the other car.
2.) Contact your insurance company immediately
3.) File a claim with the insurance company and note down the claim reference number
4.) Submit the documents required by the insurance company for making a claim
5.) File an FIR Accident Report at the nearest concerned police station
What are the benefits of car insurance
Listed below are the benefits of car insurance.
1.) Car insurance provides benefits in case of death due to accidents
2.) Covers the repair cost of repairing the vehicle due to damage caused in the accident.
3.) Covers damage caused by reasons other than accident, for example, theft, fire, etc.
4.) Provides cover for damages caused to third parties
Car insurance is a very efficient tool that will protect your dream car from damages and reduce your costs in case of an accident. There is no dearth of car insurance plans options in the market. It is always advisable to compare between different plans and choose the most suitable one for yourself.
5 Which are the best car car insurance policies?
By the way, there are many car insurance policies available in the market today, which you can compare by visiting the policy market and choose a policy according to you. Nevertheless, here are the names of some selected car insurance policies.
1.) New India Car Insurance Policy
2.) Tata AIG Car Insurance Policy
3.) Bajaj Allianz Car Insurance Policy
4.) HDFC ERGO Car Insurance Policy
5.) Oriental Car Insurance Policy
In the end
We have brought you through this article “ What is Third Party Insurance in Car Insurance? Efforts have been made to give complete information about this article, we sincerely hope that this information will prove to be very useful for you, if you have any suggestion related to this article, then you can reach it to us through the comment box. You must share this information with your friends and on social media. Thank you!